Market Snapshot: Dow and S&P 500 finish at records, book 4 weeks of gains in a row

How did benchmarks trade?

• The Dow Jones Industrial Average DJIA, +0.48% rose 164.68 points to end at 34,200.67, a gain of 0.5%, for a record close.
• The S&P 500 index SPX, +0.36% climbed 15.05 points, or 0.4%, to close at a record 4,185.47.
• The Nasdaq Composite Index COMP, +0.10% advanced 13.58 points, or 0.1%, finishing at 14,052.34, its second-highest close ever.

READ: With close above 34,000, the Dow has already cleared four thousand-point mile markers in 2021

On Thursday, the Dow gained 305.10 points, or 0.9%, to finish at 34,035.99, setting a new closing record and an intraday all-time high earlier in the session. The S&P 500 added 45.76 points to reach 4,170.42, a gain of 1.1%, booking a record, while the Nasdaq Composite Index advanced 180.92 points, or 1.3%, to 14,038.76, ending 0.4% from its Feb. 12 closing record.

For the week, the Dow rose 1.2%, while the S&P 500 gained 1.4% and the Nasdaq Composite advanced 1.1%. The Dow and S&P 500 booked a fourth straight week advance, while the Nasdaq rose for a third week in a row.

What drove the market?

The recovery from the COVID pandemic was on display in this week’s U.S. economic data, including retail sales and weekly jobless benefit claims, which also reflected the massive fiscal stimulus from Washington and the vaccine rollout. The supportive backdrop helped investors push the major stock indexes to new heights.

Earnings also have helped to boost optimism about the recovery, as the nation’s biggest banks, Goldman Sachs Group GS, +1.11% and JPMorgan Chase & Co JPM, +0.74%, produced results that are promising for the American economic outlook.

It’s been “almost a goldilocks week,” Simeon Hyman, global investment strategist at ProShares, told MarketWatch Friday in a phone interview. “There’s no shortage of good news.”

Although investors have been concerned about inflation in the economic reopening, Hyman said that capacity utilization was a “little bit of help” this week as it came in “just a little lighter than expected yesterday but still expanding.”   Capacity utilization rose to 74.4 in March, from 73.4 in February. The typical tipping point for driving “notable inflation” is 80, according to Hyman.

Hope for further improvement comes as China’s economic growth surged by 18.3% year-over-year in the first quarter, with retail sales up 34.2% in the world’s second largest economy. A number of experts noted that China’s GDP growth data on a quarterly basis, however, was lower than been expected and reflects a slackening pace of improvement.

Macroeconomic data over the next several months will be “extremely messy” as the world is now about a year out from the initial lockdowns in the pandemic, cautioned Jason Vaillancourt, co-head of global asset allocation at Putnam Investments, in an interview with MarketWatch Friday. Instead of making year-over-year comparisons, Vaillancourt suggested that investors look further back to 2019 to measure growth relative to pre-COVID times.

“The pandemic only got started in a big way,” at the end of March 2020, he said, as it was around then that many people began staying home to avoid spreading the virus.

Within stock markets, Vaillancourt said he now likes cyclical bets in sectors such as consumer discretionary, industrials and energy, as well as equities outside the U.S. partly because they are relatively cheap. Emerging markets regions tend to have higher growth and stand to benefit more from a cyclical upturn, he added.

What is “crucial for investor sentiment is that this economic recovery doesn’t show signs of letting up,” including global COVID vaccinations and fiscal and monetary support, which have been supportive to the market and the economy, according to Han Tan, market analyst at FXTM.

Despite the temporary hold on using the Johnson & Johnson vaccine imposed by the Centers for Disease Control, the U.S. has now vaccinated about 200 million people with at least one dose, or 40% of the population.

Which companies were in focus?

• Morgan Stanley MS, -2.76% shares closed down 2.76% Friday even after the company reported first-quarter profit that more than doubled and revenue that jumped 60%, boosted by strength in the institutional securities business. The bank said a single prime brokerage client cost it nearly $ 1 billion, leading some to believe that the bank was hit by the Archegos Capital Management implosion.
• Shares of Bank of New York Mellon Corp. BK, -4.04% fell 4% Friday, after the bank reported first-quarter profit and revenue that fell from a year ago, given the impact of low interest rates, but topped expectations.
• PNC PNC, +2.33% reported a first-quarter net income of $ 1.8 billion or $ 4.10 earnings per share. Shares rose 2.3% Friday.
• Citizens CFG, +0.34% reported first-quarter net income of $ 611 million and EPS of $ 1.37. Shares rose 0.3% Friday.
• Eli Lilly and Co. LLY said Friday it is seeking a revocation of the emergency use authorization granted by U.S. regulators for its bamlanivimab antibody treatment for COVID-19 alone to complete the transition to bamlanivimab and etesevimab together. Shares closed 1.79% higher Friday.
• Biomea Fusion Inc. BMEA went public Friday, with the California-based biopharmaceutical company focused on treatment of genetically defined cancers pricing its initial public offering at the high end of its expected range at $ 17 a share. The stock jumped 9.4%.
• Shares of DraftKings Inc. DKNG, +0.87%.  closed almost 1% higher, after it was named among a group of official sports betting partners of the National Football League.

How did other assets fare?

• The ICE U.S. Dollar Index DXY, -0.17%  a measure of the currency against a basket of six major rivals, fell about 0.2% to close Friday at 91.54.
• U.S. crude for May delivery CL.1 fell 33 cents, or 0.5%, to settle at $ 63.13 per barrel on the New York Mercantile Exchange.
• The 10-year Treasury note yield BX:TMUBMUSD10Y edged up by .05 to 1.59%. Bond prices move inversely to yields.
• Gold futures traded higher for a second straight day, with the June contract GCM21 rising $ 13.40, or 0.8%, to settle at $ 1,780.20 an ounce on Comex, adding to its climb after touching its highest level in seven weeks.
• In Europe, the Stoxx 600 index SXXP rose 0.9% Friday to close at a record high, while London’s FTSE 100 UKX closed 0.5% higher.
• In Asia, the Shanghai Composite SHCOMP rose 0.8%, Hong Kong’s Hang Seng HSI closed 0.6% higher, and Japan’s Nikkei 225 NIK picked up 0.1%.